Health Management Associates (HMA) has signed a definitive agreement to acquire the Florida-based nonprofit Wuesthoff Health System and its ancillary businesses. For-profit HMA is making something of a splash among Florida's nonprofit hospitals this year. On July 1, the Naples, Fla.-based hospital chain completed the acquisition (paying $22 million cash) of a 60 percent controlling interest in three Florida-based Shands HealthCare hospitals: Shands Lake Shore (in Lake City), Shands Live Oak, and Shands Starke.
And HMA may not be finished yet. "The acquisition pipeline remains active, and additional acquisition announcements are possible during the balance of the year," said HMA President and CEO Gary Newsome during a conference call with analysts.
Wuesthoff includes two hospitals--291-bed Wuesthoff Medical Center in Rockledge and 115-bed Wuesthoff Medical Center in Melbourne--and generates approximately $290 million in annual net revenue. Wuesthoff is in "very close proximity" to HMA's Sebastian River Medical Center, said Newsome. "And there are a lot of synergies we can derive from that relationship as we go forward." HMA expects to close the Wuesthoff deal by Oct. 1. Bringing Wuesthoff on board will give HMA 60 hospitals (about 9,000 licensed beds) nationwide, as well as a $650 million net revenue run rate.
HMA will take on the task of paying off Wuesthoff's $75 million in bond debt, but won't be at risk for a still-pending five-year-old antitrust suit between Wuesthoff and Rockledge-based Health First, reports Florida Today.
UPDATE: Florida Today now reports that the bond debt and other outstanding liabilities will be paid off prior to the sale by a newly formed foundation using the approximately $145 million in sale proceeds. The remaining profits from the sale will be plowed into charitable causes.
To learn more:
- read this Florida Today article
- read this Barron's article
- read these HMA press releases: press release 1 and press release 2
- learn about the company's 2Q10 financial results here
- read this Florida Today update article